Computers have revolutionized the ways by which loans are provided to customers. With the advent of the Internet, there have been even more substantial technological advancements in the mortgage and financial services industries. The Internet initially created an additional distribution channel for loan searching and origination generally through the use of application service providers. These entities developed software to facilitate online interaction between a singular lender and an individual consumer, thereby creating another revolution. There are still a large number of 3rd-party software companies that do work on the back end for large banks and commercial lending institutions to streamline their customers' back end operations and increase overall efficiencies. In addition, most lenders now have their own proprietary systems that can price a loan for a specific loan profile but only for that lending institution's own set of proprietary products. This limits the ability of a consumer to conveniently search for all loan products for which they may be qualified and to find the loan product with the best available rates.
Direct commercial lenders have come into existence whereby they offer a limited search and application process for consumers to wholesale lenders; however, the search methodology is poor and the search criteria is limited to the point that any loan search and pricing is generic and not fully customized to a consumer's profiled requests and needs. To improve on this concept, online lead generators have attempted to alleviate a consumer's pain by receiving consumer information, filtering that information toward pre-approved loans offered by lenders that are closely associated with the online lead generator, and selling the consumer information to brokers and/or lenders for future consumer contact. One of the many problems with this approach is that loan product rates are not a component of the limited search criteria, and the consumer is unlikely to receive the best rate.
In addition to their traditional presence, loan brokers eventually reintroduced themselves to the online loan process as an intermediary by creating broker software. This way, a loan broker could interact with a finite number of lenders, thereby providing the actual borrower with more choices. The broker's software functions to provide mortgage brokers and other professionals with limited information on lenders, the types of products they offer, and ideally the pricing of said products, but it does not function to inform the borrower especially as that information relates to removing confusion regarding closing costs, fees, and yield spread which are all additional costs to the consumer. Unfortunately such broker software also prevents the borrower, the true consumer, from accessing critical information directly and introduces an inefficient if not unnecessary level of contact and adds cost to the lending, underwriting, and pricing process.
Finally, an online mortgage origination industry has also come into existence whereby loan products and pricing of multiple wholesale lenders are aggregated. Once applicable loan rates and pricing are determined for a consumer, that consumer's information can be passed along to an online loan origination system to begin the actual loan application process. However, the consumer would not be certain of their qualification for a loan product until they entered the loan application process. And furthermore, without a centralized and searchable database of the lenders' underwriting and pricing guidelines, the consumer can not be certain that the loan product chosen for them is the best product for their needs even if they did qualify.
To this day, the mortgage process remains fragmented and opaque wherein a consumer is unable to know for certain if they can obtain or have received the loan that best meets their needs. The use of existing technology and a traditional loan broker does not solve the problems because the broker also lacks the tools to confirm that he is getting the ‘best’ loan for the represented consumer. There is currently no way that a consumer can match his qualifications and needs to the best available loan products and determine the associated rate pricing, monthly payments, and fees of those products.